Exam 17: Understanding and Analyzing Consolidated Financial Statements

Marketable securities that the investor company buys only with the intent to resell them shortly are called ________.

When preparing consolidated financial statements,eliminating entries are made to avoid double-counting ________.

Company B has 40,000 shares of its common stock outstanding.Company A owns 5,000 shares of Company B's stock.What method should Company A use to account for its investment in Company B?

The Savage Company reports the following information: What is the current ratio at December 31,2012?

In an efficient capital market,searching for ________.

An investor in trading securities has the following information available at December 31,2012: How does the investor report the change in market value on the trading securities at December 31,2012?

Each year,goodwill on the consolidated balance sheet is ________.

Fast growing companies tend to have ________ price-earnings ratios.

The following information is available for the Goalie Company: What is the average collection period in days for the year ended December 31,2009?

The Baseless Company reports the following information: What is the dividend yield at December 31,2012?

Company B has 40,000 shares of its common stock outstanding.Company A owns 35,000 shares of Company B's stock.What method should Company A use to account for its investment in Company B?

Presented below is the balance sheet of Hal Company at January 1,2015: The balance sheet of Monty Company at January 1,2015 is below: On January 1,2015,Monty Company acquired 100 percent of the outstanding common stock of Hal Company for $260 cash.Hal Company generated net income of $30 during the year ended December 31,2015.There were no intercompany sales.What is the balance in the Investment in Hal Company account on December 31,2015 before elimination entries are prepared?

On January 1,2015,Jane Company acquired 80 percent of the outstanding shares of Tarzan Company for $152 in cash.At the time of the acquisition,Tarzan Company's total assets were $450.At the time of the acquisition,Tarzan Company's total liabilities were $260.What is the amount of noncontrolling interests on the consolidated balance sheet immediately after the acquisition of Tarzan Company's stock? (Assume elimination entries are completed.)

On January 1,2015,Jane Company acquired 80 percent of the outstanding shares of Joan Company.At the time of the acquisition,Jane Company's total stockholders' equity was $420.At the time of the acquisition,Joan Company's total stockholders' equity was $190.What is the amount of total stockholders' equity on the consolidated balance sheet immediately after the acquisition of Joan Company's stock? (Assume elimination entries are completed.)

The current ratio equals current assets divided by current liabilities.

In an efficient capital market,the appropriate investment strategy for most investors is the ________.

The balance sheet for Lewis Company at January 1,2016 follows: The balance sheet for Martin Company at January 1,2016 follows: On January 1,2016,Martin Company paid $154 in cash for 100 percent of the outstanding stock of Lewis Company.The fair value of the assets and liabilities of the Lewis Company were equal to their book value.During the year ended December 31,2016,the Lewis Company had net income of $14 and the Martin Company had net income of $50.There were no intercompany sales.All net income for both companies is in the form of cash. Required: A)Prepare the consolidated balance sheet immediately after acquisition of stock in Lewis Company. B)Prepare the consolidated balance sheet at December 31,2016.

Goodwill from the purchase of another company appears on the consolidated balance sheet as a ________.

Under the equity method of accounting for investments,the investor recognizes income for ________.

An investor that has effective control over an investee usually owns ________ of the investee's stock.